Category: Accounting Periods & Methods
Subject: Change of Accounting Method
Title: Cash Basis to Completed Contract--Approval Procedure
IRC Sections: 446, 460
Filename: 1171.html
Date Produced: 8/96

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Background
Taxpayer is a small contractor using the cash method of accounting. Taxpayer wishes to change to the completed contract method. Taxpayer is not subject to Section 460.

Issue
Is there a means by which the taxpayer can get automatic or expeditious approval to make the change from the cash method of accounting to the completed contract method of accounting?

Answer
There is no automatic or expeditious approval procedure. The taxpayer must file under Rev. Proc. 92-20 which requires payment of a user fee. In addition, Form 3115 must be filed within the first 180 days of the desired year of change.